State of Illinois
91st General Assembly

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[ Introduced ][ Engrossed ][ House Amendment 001 ]


HB2494 Enrolled                                LRB9104654JSpr

 1        AN ACT to amend the  Illinois  Banking  Act  by  changing
 2    Sections 10 and 16 and adding Section 9.5.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.   The  Illinois  Banking  Act  is  amended  by
 6    changing  Sections  10  and  16  and  adding  Section  9.5 as
 7    follows:

 8        (205 ILCS 5/9.5 new)
 9        Sec.  9.5.  Reservation  of  corporate  name.   Upon  the
10    filing of  an  application  for  a  permit  to  organize,  an
11    applicant  may request that the Commissioner reserve the name
12    of the proposed bank.   The  reservation  shall  be  made  by
13    filing  with  the  Commissioner  an  application to reserve a
14    specified  corporate  name  on  forms   prescribed   by   the
15    Commissioner.   If  the  Commissioner  finds that the name is
16    available for corporate use, he or she shall reserve the name
17    for the exclusive use of  the  applicant.   The  Commissioner
18    shall prescribe by rule the duration of the reservation.
19        The  right  to the exclusive use of a specified corporate
20    name so reserved may be transferred to any  other  person  by
21    filing  with  the  Commissioner  a  notice  of  the  transfer
22    executed  by  the  person for whom such name was reserved and
23    specifying the name and address of the transferee.
24        The Commissioner may revoke any reservation if,  after  a
25    hearing,  he  or  she finds that the application therefor was
26    made contrary to this Act.

27        (205 ILCS 5/10) (from Ch. 17, par. 317)
28        Sec. 10. Permit  to  organize.  Upon  the  filing  of  an
29    application  for a permit to organize, the Commissioner shall
30    investigate the truth of the  statements  therein  and  shall
HB2494 Enrolled             -2-                LRB9104654JSpr
 1    consider  the  proposed  bank's capital structure, its future
 2    earnings prospects, the general  character,  experience,  and
 3    qualifications  of its proposed management, its proposed plan
 4    of operation, and the  convenience  and  needs  of  the  area
 5    sought  to  be  served  and notwithstanding the provisions of
 6    Section 7 of this Act, the Commissioner shall not approve the
 7    application and issue a permit to organize unless he shall be
 8    of the opinion and finds:
 9        (1)  that the proposed capital at least meets the minimum
10    requirements of  this  Act  determined  by  the  Commissioner
11    pursuant  to  Section  7  of  this  Act  including additional
12    capital necessitated by the  circumstances  of  the  proposed
13    bank  including  its size,  scope of operations and market in
14    which it proposes to operate;
15        (2)  that the future earnings prospects are favorable;
16        (3)  that  the   general   character,   experience,   and
17    qualifications  of  its  proposed management and its proposed
18    plan of operation are such as to assure reasonable promise of
19    successful, safe and sound operation;
20        (4)  that the name of the proposed bank is not  the  same
21    as  or  deceptively  similar  to  a  name  reserved  with the
22    Commissioner's office under Section 9.5 or to the name of any
23    other bank then operating in this State; and
24        (5)  that the convenience and needs of the area sought to
25    be served by the proposed bank will be promoted.
26    (Source: P.A. 90-665, eff. 7-30-98.)

27        (205 ILCS 5/16) (from Ch. 17, par. 323)
28        Sec. 16. Directors. The business and affairs of  a  State
29    bank  shall  be  managed by its board of directors that shall
30    exercise its powers as follows:
31        (1)  Directors shall be elected as provided in this  Act.
32    Any  omission  to  elect  a  director  or directors shall not
33    impair any of the rights and privileges of the bank or of any
HB2494 Enrolled             -3-                LRB9104654JSpr
 1    person in any way interested. The  existing  directors  shall
 2    hold office until their successors are elected and qualify.
 3        (2) (a)  Notwithstanding  the  provisions  of any charter
 4        heretofore or hereafter issued, the number of  directors,
 5        not fewer than 5 nor more than 25, may be fixed from time
 6        to  time  by  the  stockholders  at  any  meeting  of the
 7        stockholders called for the purpose of electing directors
 8        or changing the number thereof by the affirmative vote of
 9        at least two-thirds of the outstanding stock entitled  to
10        vote at the meeting, and the number so fixed shall be the
11        board   regardless  of  vacancies  until  the  number  of
12        directors is thereafter changed by  similar  action.   At
13        least  a  majority  of the directors must have resided in
14        the State of Illinois or within 100  miles  of  the  main
15        banking  premises  for  at  least  one  year  immediately
16        preceding  their  election  and  must be residents of the
17        State of Illinois or the territory within  100  miles  of
18        the  main  banking  premises  during their continuance in
19        office.  Any  director  who  becomes  disqualified  shall
20        forthwith resign his office.
21             (b)  Notwithstanding the minimum number of directors
22        specified  in  paragraph  (a) of this subsection, a State
23        bank that has been in existence for 10 years or more  and
24        has  less  than $20,000,000 in assets, as of the December
25        31  immediately   preceding   the   annual   meeting   of
26        shareholders at which directors are elected, may, subject
27        to  the approval of the Commissioner, have a minimum of 3
28        directors; provided that if a State bank has fewer than 5
29        directors, at least one director shall not be an  officer
30        or  employee of the bank. The Commissioner shall annually
31        review the appropriateness of the grant of  authority  to
32        have  a  reduced  minimum number of directors pursuant to
33        this paragraph (b).
34        (3)  Except as otherwise provided in this paragraph  (3),
HB2494 Enrolled             -4-                LRB9104654JSpr
 1    directors  shall hold office until the next annual meeting of
 2    the stockholders succeeding their  election  or  until  their
 3    successors are elected and qualify. If the board of directors
 4    consists  of  6  or  more  members,  in  lieu of electing the
 5    membership of the whole  board  of  directors  annually,  the
 6    charter  or  by-laws  of  a  State  bank may provide that the
 7    directors shall be divided into either 2 or 3  classes,  each
 8    class  to  be  as  nearly equal in number as is possible. The
 9    term of office of directors of the first class  shall  expire
10    at  the  first annual meeting of the stockholders after their
11    election, that of the second class shall expire at the second
12    annual meeting after their election, and that  of  the  third
13    class, if any, shall expire at the third annual meeting after
14    their  election. At each annual meeting after classification,
15    the number of directors equal to  the  number  of  the  class
16    whose  terms  expire  at  the  time  of  the meeting shall be
17    elected to hold office until  the  second  succeeding  annual
18    meeting, if there be 2 classes, or until the third succeeding
19    annual  meeting,  if  there  be  3  classes. Vacancies may be
20    filled by stockholders at a special meeting  called  for  the
21    purpose.
22        If  authorized  by  the  bank's  by-laws  or an amendment
23    thereto, the directors of a State bank may  properly  fill  a
24    vacancy  or vacancies arising between shareholders' meetings,
25    but at no time may the number of directors selected to fill a
26    vacancy in this manner  during  any  interim  period  between
27    shareholders' meetings exceed 33 1/3% of the total membership
28    of the board of directors.
29        (4)  The  board  of directors shall hold regular meetings
30    at least once each month, provided that, upon  prior  written
31    approval by the Commissioner, the board of directors may hold
32    regular  meetings less frequently than once each month but at
33    least once each calendar quarter.  A special meeting  of  the
34    board of directors may be held as provided by the by-laws.  A
HB2494 Enrolled             -5-                LRB9104654JSpr
 1    special  meeting  of  the board of directors may also be held
 2    upon call by the Commissioner or a  bank  examiner  appointed
 3    under  the provisions of this Act upon not less than 12 hours
 4    notice of the meeting by personal service of the notice or by
 5    mailing the notice to each of the directors at his  residence
 6    as  shown  by the books of the bank.  A majority of the board
 7    of directors shall constitute a quorum for the transaction of
 8    business unless a greater number is required by  the  charter
 9    or  the  by-laws.   The  act of the majority of the directors
10    present at a meeting at which a quorum is  present  shall  be
11    the act of the board of directors unless the act of a greater
12    number is required by the charter or by the by-laws.
13        (5)  A  member of the board of directors shall be elected
14    president. The board of directors may appoint other officers,
15    as the by-laws may provide, and fix their salaries  to  carry
16    on the business of the bank.  The board of directors may make
17    and  amend  by-laws  (not inconsistent with this Act) for the
18    government of the bank and may, by the affirmative vote of  a
19    majority  of  the  board  of  directors, establish reasonable
20    compensation of all directors for services to the corporation
21    as directors, officers, or otherwise.   An  officer,  whether
22    elected  or  appointed by the board of directors or appointed
23    pursuant to the by-laws, may  be  removed  by  the  board  of
24    directors at any time.
25        (6)  The  board  of  directors shall cause suitable books
26    and records of all the bank's transactions to be kept.
27        (7)  In  discharging  the  duties  of  their   respective
28    positions,  the  board of directors, committees of the board,
29    and individual directors may, in considering  the  best  long
30    term  and  short  term  interests  of  the bank, consider the
31    effects of any action (including, without limitation,  action
32    that may involve or relate to a merger or potential merger or
33    to  a change or potential change in control of the bank) upon
34    employees,  depositors,  suppliers,  and  customers  of   the
HB2494 Enrolled             -6-                LRB9104654JSpr
 1    corporation  or  its  subsidiaries,  communities in which the
 2    main  banking   premises,   branches,   offices,   or   other
 3    establishments  of  the bank or its subsidiaries are located,
 4    and all pertinent factors.
 5    (Source: P.A. 89-364, eff. 8-18-95; 90-301, eff. 8-1-97.)

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